Bill Gates bids a teary farewell to Microsoft

<p>Microsoft Chairman Bill Gates (R) speaks to employees as CEO Steve Ballmer looks on during a farewell event celebrating Gates' years at Microsoft, on his last day as a full-time employee at the company headquarters in Redmond, Washington June 27, 2008.Robert Sorbo-Microsoft/Handout</p>

REDMOND, Washington (Reuters) - Bill Gates said a teary goodbye on Friday to Microsoft Corp, the software maker he built into the world's most valuable technology company based on the ambitious goal of placing a computer on every desk and in every home.

He leaves his full-time executive role at Microsoft, which he co-founded with childhood friend Paul Allen in 1975, to focus on his philanthropic organization, the Bill & Melinda Gates Foundation, the world's largest charity, funded in part by his vast fortune.

At an event at Microsoft's headquarters campus here, Gates, who will become a non-executive chairman and work part-time, joined Chief Executive Steve Ballmer on stage to deliver a short speech and field questions from employees.

"There won't be a day in my life that I'm not thinking about Microsoft and the great things that it's doing and wanting to help," said Gates, who wiped away tears as the group of employees rose to give him a standing ovation.

Ballmer, a Harvard University classmate who joined Microsoft at Gates' behest, got choked up as he tried to describe Gates' impact on the company and society at large.

"There's no way to say thanks to Bill. Bill's the founder. Bill's the leader," said Ballmer. "We've been given an enormous, enormous opportunity and it was Bill that gave us this opportunity."

Gates will leave behind a life's work developing software to devote energy to finding new vaccines or to microfinance projects in the developing world. He will still work on special technology projects at the company.

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Once the world's richest man, Gates' personal fortune has been estimated at about $58 billion, according to Forbes Magazine. He has slipped to third place, behind investor and good friend Warren Buffett and Mexican telecoms tycoon Carlos Slim.

ONE BILLION AND COUNTING

Ballmer spoke about how he contemplated quitting Microsoft a month after joining the company and returning to Stanford University business school. Bill passionately implored him to stay and laid out the vision of the company.

"This is what Bill said to keep me. 'You don't get it! You don't get it! You don't get it! We're going to put a computer on every desk and in every home,'" said Ballmer.

<p>Microsoft Chairman Bill Gates (R) and CEO Steve Ballmer face employees during a farewell event celebrating Gates' years at Microsoft, on his last day as a full-time employee at the company headquarters in Redmond, Washington June 27, 2008.Robert Sorbo-Microsoft/Handout</p>

There are currently more than one billion PCs worldwide, according to research firm IDC.

Gates and Ballmer recalled the many steps Microsoft took to evolve from a fledgling start-up to a company of more than 90,000 employees making everything from video game consoles to computer software.

The pair remembered the battles with computer industry titan International Business Machines Corp's, an early partner turned rival when it rolled out a competing operating system to Microsoft's flagship software, Windows.

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"We went toe to toe with the biggest, most powerful computer company in the world and we beat them," said Ballmer.

The 52-year-old Gates said the company had made "a mistake" not recognizing earlier how Web search and online advertising -- businesses dominated by another start-up turned powerhouse, Google Inc -- could transform the software industry.

However, he cautioned skeptics not to count out Microsoft.

"I love that kind of thing where people are underestimating Microsoft," said Gates. "Yes, we make mistakes and we know it, but we come back and learn from those things. A lot of our best work is the result of that."

After 33 years, Gates said he sometimes finds himself lost in thought, driving to Microsoft without realizing it. He also said he will move out of his corner office -- making way for Ballmer -- into a smaller area one floor below.

"I am sure there will some day next month where I start thinking about software and I will start driving here to Microsoft, go up to the fifth floor and walk down to my office and they will be remodeling it," said Gates with a chuckle.

"In fact, they were wondering if I was leaving at four or five today, so they could get started on that."